Vermont: Local-Vore Yea, Local-Burn, Nay; But No Dirksen

by Martin Harris

In a paraphrase of a relatively new but well-known Kemp-Friedman aphorism, Vermont’s official position towards Natural Gas –“import it, don’t produce it”– you might explain Vermont’s no-known-reserves categorization as the logical result of a well-known anti-business, pro-green-energy, high-tax intensive-regulation political environment. Indeed, K-F were right: whatever you tax, and regulate, and disparage, and forbid, you get less of (exception: Prohibition and Roaring Twenties bootlegging) and whatever you don’t tax, regulate, discourage, and disparage so hard you get more of. If you prospect for Natural Gas, you are more likely to find it than if you don’t. There’s no NG prospecting taking place in Vermont now, thanks, most recently, to the State’s first-in-the-nation legislation to ban hydraulic fracturing, the relatively-new process which has made recovery of hydro-carbons from “tight” rock formations feasible and profitable. It led directly to prospecting (and major new finds in TX, PA, OH, LA, ND and SD) in NY; specifically, in the Appalachian Basin Shale Formation, which underlies a stretch running from south of New York to north of Vermont and is known by geologists to have similar formations on the east side of Lake Champlain. Located even deeper than the Marcellus Shale, the Utica Shale underlies most of New York State and Montreal City. There’s an undated Vermont Geological Survey study entitled “Northern Vermont Southern Quebec Utica Shale Equivalents” available to Web surfers. Banning “fracking” has (by Montpelier intent) discouraged prospecting and the probable NG finds which might have been revealed, exactly what the now-defunct Cambrian Corporation was established to drill for in the late 70’s. It also insures continuing NG imports (by Montpelier intent) and the corresponding movement of wealth out-of-State (by Montpelier intent?) As you decide, consider a relatively old FDR aphorism: “nothing in politics happens by accident.”

You’d think that a State whose residents (the highly-vocal ones, anyway) enthuse over “local-vore” and who use in their list of reasons the positive economics of food-spending staying in-State rather than flowing to –ugh—out-of-State corporations, would also embrace “local-burn” or energy self-sufficiency, in like manner to food self-sufficiency. Apparently not, even though the numbers are impressive.

The Feds have long published data on household spending on everything from housing to transportation, and a 2010 Bureau of Economic Analysis study showed that, nationally, 9% of wage and salary income went for fuel and 13% went for food. The BLS also said in a 2003 study that personal (not per capita) income (not exactly the same as wage-and-salary, but close) was $45,000, and that highway-fuel spending was $600 (all numbers rounded) and therefore food spending averaged $5900 while fuel-at-home averaged $4000-600 or $3400. The two categories add to a total of $9300. Multiplied by 350,000 earners in the 630,000 (2010 Census) of population, that’s $2.26 billion of earned capital being spent annually for food and fuel. To keep the exercise simple, not included are dollars being spent for the 65% of electricity used in-State (Vermont Yankee now, but probably not for long, sells Vermont ratepayers the other 35%) which works out to 48% imported and 15% domestic, according to the Public Service Department. If Vermont’s local-vore percentages match the national-average 20%, what goes out-of-State for food is 80% of $5900 or $4700, earned and spent by the 350,000, or $1.6 billion. Much of that, local-vores argue, should stay in-State. The 630,000 make up about 252,000 households (2010 census), and adding maybe 50,000 for relatively low-energy-use commerce or industry, thanks to Montpelier policies, could possibly meet their in-buildings energy use from in-State NG. If so, local-burn mean that the fuel-purchase $3400 (stove wood not counted) spent on (mostly heat, some cooling) about 300,000 occupancies/buildings, or just over $1 billion, would stay in-State. Total: $2.6 billion, give-or-take. As the late Senator Everett Dirksen supposedly once said, “a billion here, a billion there, and pretty soon you’re into real money.”

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A tantalizing hint –just a throwaway line, no detail—in Energy Information News last May which described Vermont as “likely to be the home of bountiful Natural Gas supplies” , making local-burn theoretically as achievable as local-vore, adds further weight to the argument that the ideology pushing the latter –self-sufficiency in “green” food, even at higher price for arguably higher quality if not all-season variety and availability—is the opposite to the ideology opposing in-State NG consumption. Why? Maybe it’s the “green” insistence that only above-ground energy (hydro, wind and solar) which currently furnish maybe 2% of national energy usage, and bio-mass (which remarkably gets a pass on carbon emissions by politically-convenient EPA rule-invention) are environmentally OK, even if frequently challenged, and anything from below-ground sources (coal, oil, NG, uranium) is decidedly never OK, even if carbon emissions are really zero (nuclear) or lower-than-wood (NG) and even if the “green” goal of local self-sufficiency is subordinated to satisfy the remarkably and conveniently flexible “green” ideology of no-underground-source-energy-use-unless-imported-via-pipelines-or-wires.

And there’s another inconvenient contradiction as well. One of the arguments for local-vore is based on the multiplier effect, recognized for primary-sector industries, which create new wealth from solar energy: think large-scale commercial farming (which, by definition, can’t be “local” for markets) or small-scale mini-farming (which can and should). The economics of both have been studied at length by such think-tanks as the National Organization for Raw Materials, and the conclusions are that such new-wealth-generation has a multiplier of 5 to 7, as the primary-economic-sector earnings then re-cycle repeatedly through all the others. That’s been the argument underlying new State investment in beyond-the-farmgate ag-related enterprises. But NG is a primary-sector industry too. Just like agriculture or bio-mass, it too is founded on solar energy; but from really-older-than-dirt geologically ancient solar energy, not this year’s or last year’s sunshine. Maybe the underlying problem in Vermont’s otherwise-inexplicable resistance to in-State NG exploration and utilization is “ageism”? And isn’t “ageism” one of the many “isms” which modern inclusive and multi-culturally-sensitive Vermont proudly rejects? Everett Dirksen would have had an appropriately wry quote on the subject.